Zimbabwe freezes assets of top company

The government has frozen the assets of one of Zimbabwe’s oldest and largest companies, and the family behind the conglomerate suspects the action was taken to preserve the job of its CEO, who is close to President Robert Mugabe’s party.

The seizure earlier this week by the Home Affairs Ministry is likely to renew questions about whether the troubled country, whose government seeks to attract investment, is safe for business. The party of Prime Minister Morgan Tsvangirai, who is in a power-sharing coalition with his erstwhile rival Mugabe, condemned what it called a “mafia-style grab.”

“We believe that asset grabbing sends wrong signals at a time the country wants to attract investment,” the Movement for Democratic Change said.

The government announced it seized Kingdom Meikles’ assets pending investigations into allegations of currency violations by company executives. The Zimbabwe Stock Exchange also was told to suspend trading in Meikles shares. The company has banking, investment, supermarket, agricultural and retail interests, as well a leading Harare hotel.

Sternford Moyo, an attorney for the Meikles family, said Thursday the government action is aimed at stopping a meeting next week at which shareholders were expected to demand the departure of group chief executive Nigel Chanakira, who has been in a long-standing boardroom dispute with John Moxon, head of the Meikles family, and other board members and shareholders.

“This is typical of the abuse of power we have seen in Zimbabwe,” Moyo said. “If there is a case, why haven’t any charges been made? Why hasn’t it been taken to the courts first?”

Chanakira did not respond to requests for comment from The Associated Press.

Moxon, accused of illegally exporting $7.8 million in funding from Zimbabwe to the company’s luxury Cape Grace hotel in neighboring South Africa, denies any wrongdoing.

At a shareholders’ meeting earlier this year, 90 percent of stockholders voted for the Meikles group to split from Chanakira’s Kingdom Bank. Chanakira and two other directors have refused to quit.

Next week’s shareholders meeting was expected to again demand Chanakira’s departure on grounds he mounted a witch hunt against Moxon and other executives and shareholders and brought criminal allegations against them to thwart his ouster.

The blue chip company brought in Chanakira as a law was being formulated in 2005 that stipulated that all white-owned businesses needed to have 51 percent black shareholders. With the merger of Chanakira’s Kingdom Bank with Meikles, the company was brought into compliance with the law that was enacted a few weeks later.

Many businesses have teetered toward collapse due to the country’s economic meltdown but Meikles, with its broad range of assets, has continued to be profitable.

Earlier this week, Mugabe sought to reassure hundreds of businessmen that their potential investments in Zimbabwe would be safe, saying “the sanctity of property rights and the rule of law in all its dimensions are fully respected.”

Zimbabwe’s economic meltdown began after Mugabe ordered the seizures of thousands of white-owned commercial farms in 2000, disrupting the agriculture-based economy in the former regional breadbasket.

While many businesses have teetered toward collapse due to the country’s economic meltdown, Meikles, because of its broad range of assets, has continued to be profitable.